JACKSON -- State Rep. Mike Shirkey said Tuesday that allowing more competition in
Michigan's electricity market will improve the state's business climate.

"Energy is always one of the top expenses for businesses,"
Shirkey said.

"I think this is a sensible raising of the cap we have right
now," he said.

Shirkey, R-Clark Lake, has introduced legislation he said would allow a
10 percent cap on electricity competition to be raised by the Michigan Public
Services Commission. Michigan's 2008 energy-reform law limited competition to
10 percent of utilities' sales.

Shirkey responded during a media teleconference. "Indeed
when the customers leave the utility there are some fixed costs that remain,"
he said. "But what's often missing in that dialogue is there are often some
very significant expenses that are jettisoned when those customers leave."

Even if there were cost savings, the fixed costs would still
be there, said Consumers Energy spokesman Jeff Holyfield. The fixed costs
reflect the long-term investments that Consumers has made in its Michigan power
plants and the long-term contracts it has to buy electricity from Michigan
power plants owned by other companies.

The utility also has responsibilities that competitors do
not, Holyfield said. If a rival provider is unable to deliver the energy to the
customer, Consumers has a legal obligation to do so, he said.

The legislation would allow for regular review by the Public
Services Commission once demand reaches "trigger points," Shirkey said. The
commission could then raise the cap by a maximum of 5 percent per year if it
determined such an increase would not be harmful, he said.

"There really are no perfect numbers between 0 and 100 that
can be defended (for the cap)," Shirkey said. His legislation would create a "process"
to determine the cap rather than set a "magic number," he said.